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2020 resilience creates a strong platform for 2021 franchising growth

2020 resilience creates a strong platform for 2021 franchising growth

Following the massive social and business disruption in 2020, franchising in Australia looks poised for solid expansion in 2021.

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Franchising proved the most resilient segment of the small to medium business sector during the impact of the COVID-19 pandemic. When COVID-19 hit, franchised businesses were employing almost 600,000 Australians and contributing more than AUS$184bn to the national economy.

The varying business restrictions in place across Australia for most of the year created a tough economic climate and demanded adaptability, determination and innovation by all businesses and franchising stood out as one of the most robust business models.

In the past 12 months, the Franchise Council of Australia (FCA) has focused on providing practical advice and assistance to franchisors and franchisees including:

• Guidance around navigating new regulations and restrictions

• Assistance with accessing government support programs

• Supporting franchises in commercial leasing negotiations

• Providing information to support the well-being of franchisees and staff The FCA engaged deeply at all levels of government both informally and formally, including:

• Facilitating COVID-safe business recovery by emphasizing the specific assistance and regulatory changes needed by diverse business sectors

• Bringing bad commercial leasing practices and landlord misconduct to their attention and urging

government intervention

• Reinforcing the need for fairness in application of operating rules across sectors, including highlighting disparity between public and private outdoor workers

• Encouraging Federal Treasury and state governments to introduce or continue support for struggling businesses and workers facing unemployment

• Making submissions on specific issues to various state government small business departments on business restrictions, exemptions, customer registers and industrial relations

The core of our advocacy has been a concerted campaign of dialogue with members to test government policy and regulatory changes, as well as to provide input on specific measures requested by members.

Feedback from FCA members, corroborated by a high level of member retention and new memberships, is that they feel they have been supported, listened to and represented through access to information and resources, and government advocacy.

The need to innovate

After pivoting quickly in a marketplace that transformed almost overnight, franchisors began looking to the future with new strategies for customers who adjusted to the convenience of online shopping and delivery services.

FCA members have shared many stories of innovations quickly rolled out across franchise networks to ensure the ongoing viability of franchise businesses and many of these are now embedded as normal functions of their ongoing business.

“Interest in entering franchising has accelerated in recent months as many people seek to establish new careers or stable business income streams”

The FCA’s most recent quarterly national survey of franchise businesses (conducted by FRANdata Australia) showed 64 per cent of respondents were optimistic about 2021 as trading conditions continue to improve.

The 2020 MYOB FCA Excellence in Franchising Awards provided yet more examples of franchise businesses succeeding in an extremely difficult year for small business owners. The resilience of winners and finalists in the face of adversity, and the continued contributions award recipients have made to their franchise systems and communities speaks volumes for the strength and tenacity of the sector and all those who depend on it for their livelihoods.

The support and resources provided to franchisees through franchise networks have more than ever demonstrated the value of belonging to a franchise system and interest in entering franchising has accelerated in recent months as many people seek to establish new careers or stable business income streams.

Franchise inquiries are being reported to have almost doubled compared to the previous year, and in some instances, interest levels are much higher.

The current market presents a very real opportunity for franchise systems to access a pipeline of qualified franchise candidates with access to their own financial resources, who are looking for the structure and support provided by franchising as small business owners.

How to take your brand to Australia

For an international brand looking to expand to Australia, or grow their footprint here, getting your brand in front of this talent pool at the 2021 Franchising & Business Opportunities Expos is a great way to start.

The well-established expos – to be held across Australia throughout the year – routinely draw crowds of business-ready visitors looking to find out more about becoming a franchisee and make decisions about the types of businesses and franchise systems that are right for them.

For an international franchisor, a broader understanding of Australia’s franchise operating environment is also essential and in the year ahead, the FCA is determined to get the schedule of program initiatives disrupted by COVID-19 back on track, including the National Franchise Convention (NFC21), to be held in Melbourne in August.

Franchising and small business leaders from across Australia are expected to attend NFC21, to immerse themselves in a program of practical ideas and information at the most comprehensive professional development event on the FCA’s annual calendar.

A feature of NFC is the annual Legal Symposium, which provides both franchise executives and the legal profession with vital regulatory updates, including any developments with the Franchising Code of Conduct, which is the mandatory code governing the sector in Australia.

A dedicated international stream connecting international franchisors to the wealth of knowledge and networking on offer at NFC21 will aim to assist overseas brands on their Australian expansion journey.

“A well-qualified pool of potential franchisees are looking for new opportunities in a post-COVID economy”

The FCA’s first Sustainable Food Leadership Forum, open to members and non-members looking for leadership, innovation, best practice and improved regulatory understanding of single-use plastics, food waste and recycling, is scheduled to be held in March.

And while there will be more challenges ahead for small businesses in Australia, there is no better way to meet them than as part of a strong and supportive FCA member franchise network.

Any franchisor looking to access or expand in Australia is well advised to take up FCA membership as a vital tool to gain direct and unfiltered information and understanding of the operating landscape – as so many franchisors did in 2020.

While trading conditions remain tough, the strategic value of being part of a strong franchise network hasn’t gone unnoticed and as we move into 2021, a well-qualified pool of potential franchisees are looking for new opportunities in a post-COVID economy.

As long-established sources of employment have shed staff, especially in the hard-hit tourism, travel and hospitality sectors, many hard-working Australians are betting on themselves for the next chapter of their career.

Even as the rest of the economy looks uncertain, the demand for franchise businesses in Australia has boomed as people search to secure a better future for themselves and their families.

THE AUTHOR

Mary Aldred is the CEO of the Franchise Council of Australia.

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